Blockchain & Government Future of Web 3.0

Contents

1. Blockchain- Introduction 3

2. Blockchain Concepts

4. Blockchain experiments by Indian players

5. Steps of Blockchain implementation

6. Challenges

1. Adoption Challenges
2. Technical Challenges

7. Future of Blockchain And Conclusion

1.Blockchain- Introduction

Blockchain is innovation that forms a reliable assistance in a conniving climate. It utilizes replication of appropriated frameworks to assemble a decentralized assistance that accomplishes similar objectives with a confided in brought together one. Beginning around 2008, blockchain execution has detonated, fundamentally determined by its local capacity to help any kind of computerized exchange. Blockchains have been taken on by Wall Street venture companies to empower exchange cost decrease, Silicon Valley new businesses as an elective method for raising assets through beginning coin contributions, and by one government, Venezuela, to support worldwide interest into the country. The calculations that power these disseminated exchanges have led to a by and large new strategy for safely putting away information in a computerized world that is in many cases ill-disposed. Since blockchain ensures high help accessibility as well as information honesty, any industry in which exchanges or cycles depend on the utilization of a confided in outsider, or where a solid assurance of safety is required, can consider carrying out blockchain arrangements, as should states around the world.

What ascribes of a blockchain might be useful in government? Blockchain gives a way to guarantee that any duplicate of the information will constantly be accessible, obvious, and reliable. It capacities like an old Xerox machine as far as information scattering, as in it can make duplicates of anything accessible to any individual who utilizes it. As for trust, it acts more like a legal official public, ensuring that any duplicate of information is credible and that the duplicates can't be neglected or falsified. At long last, as far as exchange handling, it capacities like an overall record in which exchanges should be recorded in a similar request.

To deal with information sharing, exchange handling, and approval, there is a bunch of imitated servers, called hubs. Every hub runs an agreement calculation, which furnishes a method for agreeing with each and every hub about a given exchange, with no human intercession. The calculation should empower the framework to continue in any event, when some level of the hubs discretionarily fall flat. There are different calculations, examined exhaustively later, however it is critical that popularity based ideas, for example, majority and larger part casting a ballot are fused into them. The all-encompassing objective of such a framework is to utilize replication to give security (explicitly accessibility and honesty), and to empower the disseminated servers to act like a concentrated chief.

The number of disappointments blockchains can endure or the level of hubs that can fizzle without compromising security-relies on the specific use case and the sorts of disappointments. For instance, a conveyed record framework might have to endure "crash" disappointments, or those disappointments that happen when flawed hubs essentially quit handling demands. Such frameworks are generally ready to cover the disappointments of dependent upon one-half of the hubs. Disappointments like programming bugs, equipment blunders, and antagonistic (digital) assaults cause Byzantine deficiencies. Byzantine Fault Tolerance (BFT) frameworks endure dependent upon 33% of their hubs by giving more grounded ensures between hubs through cryptographic strategies.

Blockchain history. The allotted structures technical principles that underpin blockchain had been tested in 1982 through Leslie Lamport. Lamport brought and solved the allotted consensus trouble for BFT, in an evidence he named the Byzantine Generals Problem. The answer states that to tolerate one arbitrary failure, the gadget calls for as a minimum 4 replicated nodes in order to attain a consensus on a selected decision. A greater generalized assertion is that to tolerate off Byzantine failures, the gadget has to have n≥3f+1n≥3f+1 nodes. In 1999, Miguel Castro and Barbara Liskov have become the primary to use Lamport`s consensus in a functioning set of rules they referred to as Practical Byzantine Fault Tolerance (PBFT). In 2008, a pseudonymous individual, or group, named “Nakomoto” used consensus protocols, much like BFT, to create Bitcoin. Bitcoin's innovation became to construct a decentralized gadget as a relied on broking for changing money, and acts in a comparable manner as authorities and banking structures do with cash. Viewed historically, humans used one of a kind styles of alternate for buying and selling matters of value. In the case of Bitcoin, one of the maximum well-known first purchases became pizza. Purchasing that equal pizza over the long time could were finished differently, as is proven in Figure 1, every with one of a kind consider providers.

Fig. 1. The evolution of how people exchange products (from exchanging products directly to using currency, credit, and cryptocurrency, up to the possible future, with Facebook proposing “Libra.”).

Bitcoin utilizes a methodology called Proof-of-Work (POW) - based agreement (portrayed more meticulously later) to permit clients to trade computerized "coins" with one another with certainty. Not the same as the exemplary BFT conventions that endure a small amount of hub disappointments, PoW expects a marginally unique disappointment model called the computational limit disappointment model. The framework is thought of as substantial as long as no foe controls over 51% of the complete computational power. Through PoW, the framework upholds an open and straightforward pseudonymous climate where any client can partake. Notwithstanding, PoW requires a great deal of register power, as the Bitcoin framework retools itself continually to keep the calculation tuned to authorize time limitations on exchange approval.

2. Blockchain Concepts

All blockchains work to settle on decentralized hubs accomplish a settlement on the all out request of exchanges through cryptography and a fundamental agreement component. In fact, blockchains for the most part can be categorized as one of two classes: permissionless or permissioned. Permissionless blockchains permit anybody to take an interest, are thought of "open," and have trust given by calculations. Conversely, permissioned blockchains are generally "private" or "consortium" and all member personalities are known however no member should be relied upon. Practically speaking, variations exist where there is no unmistakable line between various kinds of blockchains. For example, Ethereum, an ordinarily permissionless blockchain, can be set up as a private blockchain called the Ethereum private organization. Endeavors have additionally been made to accomplish secrecy for permissioned blockchains.

Fig .2 Traditional database vs. Blockchain base distributed ledger

Current Paradigm:

? Central authorities transfer actual value between two parties

? Multiple intermediaries required to facilitate of assets and create trust

Blockchain Paradigm:

? Distributed nodes that maintain a shared source of information

? Trust enabled by cryptographic algorithm

-       Fig. 3 Merkle tree structure

Merkle Tree is at the heart of the Blockchain Technology

The cryptographic security in Blockchain comes from a twofold information structure with hash pointers. Merkle tree, or hash tree, as it is called, is a conveyed information structure where information blocks are assembled two by two and the hash of every one of these squares is put away in a parent hub. This gathering of hash codes proceed till the root hub. This gives ascend to the changelessness of a Blockchain as altering of any square will prompt altering of the relative multitude of going before hashes till the root hub which is carefully designed. The other benefit of Merkle tree is the confirmation of enrollment/proprietorship as knowing the root part is to the point of knowing every one of the individuals in the tree. Accordingly hash tree gives quicker handling of information when contrasted with conventional twofold tree.

Types of Blockchain: All Blockchain can be classified into three categories: Public, Permissioned, and Private. A public Blockchain is one where anyone can read or write on the platform, provided they can show proof of work. A permissioned Blockchain offers selective transparency where only selected nodes have the rights to access and provide consensus on that transaction. The third Blockchain type is a private Blockchain where only chosen players have the rights to join the network which creates a closed loop environment.

Public Blockchain

Permissioned Blockchain

Private Blockchain

Fully decentralized & Transparent - Anyone can read, send transactions & participate in the consensus process

Quasi decentralized where consensus is controlled by preselected set of nodes and Read permission is restricted to participants

Centralized–requires ‘high trust’ entity where Write permissions are centralized to one entity and Read to all participants

Blockchain key features:

Blockchain benefits:

3.         Blockchain Application

Blockchain is broadly investigated across ventures and different use cases are being explored different avenues regarding. While the vast majority of the utilization cases include different partners in the esteem chain or at industry level, there are additionally use cases like steadfastness and Know Your Client (KYC) handling which are explicit to a solitary association. Monetary administrations players are arising as the forerunners in distinguishing Blockchain use cases, different enterprises are likewise getting up to speed.

Banking and Financial Services sector

The Financial Services industry is witnessing an increasing number of Blockchain-based use cases that yield the potential to drive operational efficiencies and improve customer experience. There are multiple experiments in “Cross-border remittances”, “Post trade settlements”, “Trade Finance”, and even “Loyalty programs” applications from the financial services giants.

Blockchain use cases in Financial Services industry

Non-Financial Services sectors:

Despite financial players being the first movers to explore this Distributed Ledger technology, non-financial players have been paying attention and looking for ways to leverage the opportunities that Blockchain offers. The front-runners among them are retail, travel, healthcare, telecommunications and public sector industries. The major use cases applicable to these industries are focused on the decentralized data storage, data immutability, and distributed ownership features of Blockchain.

Blockchain Application in the Energy Sector:

Cross industry application:

4.        Blockchain experiments by Indian players

5.         Steps of Blockchain implementation

6.         Challenges

In a 2018 report on digital forms of money and blockchain in Europe and Central Asia, the World Bank expresses that "arrangement creators should find some kind of harmony between controlling the promotion encompassing these new advancements and releasing conceivably groundbreaking new open doors. While empowering and working with these advancements, they ought to get ready to make new guidelines to make a level battleground for new and old enterprises, by changing monetary oversight, purchaser assurance, and expense organization". The next year, the European Commission summed up to the World Trade Organization's Global Trade and Blockchain Forum what the specialized and legitimate difficulties for government utilization of blockchain are: incorporation with existing frameworks, adaptability, blockchain-to-blockchain interoperability, absence of an arrangement system for digital currencies, and the enforceability of savvy contracts. That absence of a structure was additionally referenced at the 2019 Organization for Economic Co-activity and Development Global Blockchain Policy Forum. Without such a structure, the financial ramifications of focal government use of purported stablecoins (e.g., Facebook's Libra) would be eccentric and wide running. The examples gained from government reception of blockchain range from tending to the security ramifications of record straightforwardness through cryptography to anticipating the expanded expenses of carrying out blockchain comparative with more experienced innovation. In this part, we survey reception difficulties and how legislatures have confronted them to support development, give data about the specialized difficulties and close with a short conversation.

6.1 Adoption Challenges

Industry and government adoption. Grasping the different implementations of blockchain and their capabilities pose challenges for decision makers when it comes to data governance, privacy and security regulations, and standards. To address such issues, policy makers should take time to assess the technology, look for standards to be developed, and gather experience with the technology. Academic and industrial efforts have been made to discuss and create standards for blockchains to be used in different domains. The International Standards Organization Technical Committee 307 has published three standards, including a vocabulary, a privacy and personally identifiable protection consideration, and a smart contract overview. Another concern is interoperability of blockchains, which includes both exchanging data among blockchains and transferring assets between different blockchain systems. Both research and industry efforts have been made to create such a service. Yet due to the rapidity with which blockchains types are being developed and adapted, it remains to be seen whether interoperability will create new development opportunities for developers, and—if so—whether governmental decision makers will wish to fund the work.

Governmental role in adoption. Governments worldwide have started to develop policies or government strategies for the adoption of solutions. The experience that they have gained with cryptocurrencies has given them insight into how they could use blockchain to reduce transaction costs. They may determine that it is more efficient to execute cross-border trade transactions via blockchain through cryptocurrency. The realization of such transactions, however, requires complex integration work and a conducive regulatory environment. Governments that utilize blockchain technology should partner with private firms to both encourage innovation and develop a flexible regulatory framework. An example is the United Arab Emirates’ support of blockchain, in which they created a regulatory sandbox for technology companies to test blockchain solutions for FinTech and for streamlining data interoperability across government services. In the United States, the Boldline Accelerator program is similar in its support of public-private collaboration and has discussed how to use blockchain for identity management, tracking human trafficking, Visas, and shipping fraud. Public-private collaborations should focus on developing blockchain interoperability and standardization, as applied to a carefully selected set of inefficient bureaucratic use cases.

Cost of blockchain. The potential for blockchain to reduce transaction costs is appealing to government, as noted earlier. For digital platforms, blockchain can reduce the cost to start up new marketplaces, as well as audit the validity of transactions. However, their decentralized nature can introduce new inefficiencies and data governance issues. Blockchains’ strength in guaranteeing data integrity through immutability may come at a premium, relative to having the same guarantee in a centralized application. Transaction costs have been found to be higher for permissionless blockchains when compared to centralized solutions, and blockchain applications can cost significantly more to operate than a cloud-based centralized equivalent, even after controlling for cloud service utilization fees.

Data quality. Blockchain does not protect against data from untrustworthy sources, such as authorized but potentially tainted parties. It cannot prevent well-formatted but incorrect or inaccurate data from being sent and stored in the system. As a result, blockchain may be used as an illegal content distribution channel. The system may also consist of data with low quality or high inaccuracy. Such data quality issues might be harmful in applications where transparency of the data is desirable, especially in government applications. Although blockchain can be used as an auditing system for validating these data, the data are already distributed and cannot be retrieved from all parties with certainty. A decentralized system that allows any two parties to anonymously exchange assets may provide a haven for those wishing to perform illicit activities without fear of reprisal. As a result, existing solutions usually involve additional layers to detect or ensure data quality. It is not clear whether such a layer will provide the desirable analysis and become generic enough to ensure data quality.

Correctness and security of the system. Several blockchain systems intentionally make their consensus protocols proprietary, making it difficult to trust in the correctness and security of the platforms. Consensus protocols are complicated and the implementation in a complex real system requires extensive development, which may introduce unintended consequences, as has been observed. Before adopting a blockchain solution, the underlying mechanism and the system implementation should be carefully reviewed. Even though most peer-reviewed works have been carefully reviewed by experts, errors in some solutions are still found later. Therefore, it is important to evaluate whether the implementation matches the theory and design of the blockchain. Some efforts have been made for e-government applications. It is yet to be seen whether the solutions are generic and useful enough to fully evaluate the systems.

6.2 Technical Challenges

The exhibition compromises and blockchain principles. There is nobody size-fits-all blockchain framework. Various methodologies have been proposed to address various issues, like better inactivity, throughput, adaptability, and transfer speed. For sure, every convention has made compromises for instance, to diminish the quantity of messages hubs expected to trade in the convention, the agreement ordinarily includes more strides to finish. All in all, such a convention has longer idleness to accomplish higher throughput. Before broad turn of events and reception, a few inventive first movers should execute arrangements that consider the compromises among security, productivity, and vigor.

Albeit critical exertion has been placed into growing new blockchain stages, it isn't not difficult to foster both right and productive situation. Indeed, creating agreement conventions resembles designing cryptographic frameworks, which require aptitude in cryptography, security, and the hypothesis of appropriated frameworks. Hence, master survey, approval of both the hypothesis and execution of new blockchain stages, and principles suggestion (e.g., digital currency trades, running blockchains in applications like clinical preliminaries, and so on) are alluring if the maximum capacity of blockchain is to be understood.

Versatility. Versatility can be deciphered as the quantity of hubs and the quantity of clients. The quantity of hubs is a worry during blockchain arrangement what number of hubs would it be a good idea for one to use to begin the assistance? The quantity of clients is a worry for the responsibility what number of solicitations would it be advisable for one to expect and what are the measures of the solicitations? Both permissionless and permissioned blockchains have versatility limits. The open idea of the agreement instruments of permissionless blockchains permits anybody to join and subsequently generally includes huge number of hubs. The issue for such blockchains is that they typically experience the ill effects of long exchange inactivity (where it takes more time for the exchange to be accessible) and have not scaled to numerous client exchanges in certifiable applications. In any case, permissioned blockchains can scale to an enormous number of clients with less dormancy, however they depend upon few blockchain servers. Half breed blockchains address the adaptability issue, however each has its own difficulties and most have an adequately enormous number of agents to ensure rightness of the situation (wellbeing and liveness)- for instance, more noteworthy than 600. A BFT convention of such a size, in any case, can be unreasonable. Other BFT calculations, for example, the digital currency Algorand, eliminate the need to run PoW by applying demonstrated cryptographic procedures alongside obvious arbitrary capacities and advisory groups, be that as it may, once more, have a limit. Algorand depends upon the quantity of coins, which may restrict its reasonableness in certifiable sending. The ideal blockchain that adjusts versatility for the two clients and servers still can't seem to be found.

Security and consistence. Security and consistence are dependably central issues in legislative applications. Albeit traditional blockchains give accessibility and respectability, the information are basically straightforward all members may openly survey exchanges. This implies that a designer ought to be cautious in choosing the sort of blockchain and play out a utilization case examination that incorporates protection and security ensures comparative with execution needs. With the current administrative environment of states zeroed in on safeguarding client information, blockchains become particularly dangerous given their open and permanent nature. Simultaneously, laws intended to shield the protection and security of people's data in all actuality do give a guide to planners. Summed up models incorporate the California Consumer Privacy Act of 2018 and the European Union's General Data Protection Regulation of 2016. In the medical services space, the Health Insurance Portability and Accountability Act and the Health Information Technology for Economic and Clinical Health Act are the reason for interoperability rule changes proposed by the Office of the National Coordinator, as well as the Centers for Medicare and Medicaid Services. In light of the first two demonstrations, scientists at MIT assembled a PoW agreement convention called Medrec for mining patient data. This kind of clinical information is becoming normalized through the execution of EHR frameworks that influence informing conventions, for example, Health Level.

Timing suppositions. Most permissionless blockchains accept a coordinated organization (i.e., all imitations know the message transmission time), which is certifiably not a pragmatic suspicion. For the framework to be right (wellbeing and liveness), there should be an enormous number of hubs that effectively partake. In this way, the accuracy of such a framework in a limited scale or private setting can be sketchy. In any case, most permissioned blockchain conventions accept something many refer to as halfway synchrony, in which the organization deferral and handling delay by the hubs are limited by a furthest limit obscure to all hubs. It is accepted that every hub in the organization will ultimately react, and on the off chance that a given hub doesn't react, different hubs will deal with it as per the convention, giving a response and guaranteeing that the organization won't get stuck standing by endlessly. The weakness of this approach is that it presents execution and security issues-imagine a scenario where an enemy can some way or another control this organization delay so that makes hubs get out of hand or to surrender data. In this sort of organization, the framework may basically quit handling any solicitations very much like a crashed administration, regardless of whether all hubs in the framework are right. An expected answer for this might be the utilization of what is known as an absolutely no concurrent BFT agreement convention, in which hubs have no upper bound accordingly time so the conventions are versatile to a wide range of assaults. Investigation into this area is progressing and incorporates a few potential arrangements.

7.         Future of Blockchain and Conclusion

Blockchains have developed past digital currencies to universally useful and can be utilized across a variety of uses, especially those that need high help accessibility and information respectability. In the event that their reception increments, blockchain-based arrangements might once again introduce a confided in intermediary: the server farm, regardless of whether in the cloud or on premise. A cloud-based blockchain framework makes the cloud supplier into another kind of confided in dealer. On the off chance that rather hubs are on premise yet are utilized by general society, anything element is facilitating them turns into the confided in agent, and the framework becomes powerless against any disappointments that might deliver the whole framework problematic. Hence, supplanting an uncertain human or administration with a blockchain may move hazard instead of killing it.

The specialized difficulties for blockchains, for example, being completely security saving, guaranteeing consistence when fundamental, and being adaptable, presently can't seem to be completely settled, and more work is expected to address them. However in spite of these difficulties, blockchains can improve applications and will start to be the answer for use case-explicit disseminated frameworks issues. Most blockchain applications were monetary right away, similarly as many great and demonstrated advancements have been. Blockchains are presently being utilized in different spaces, like government. They might be the best innovation to send when a need to circulate information through a framework that requirements to ensure information trustworthiness and administration accessibility exists, yet the capacity to get it going is restricted.

"Blockchain presents valuable qualities, particularly related to tamper-evident and permanent databases and record-keeping, that could enhance transparency, accountability, and citizen engagement."